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Compost is a commodity now that small operators can collect what garbage haulers used to pick up.

It's a rule that small composters love, trash haulers dread, and the city can live with.

On December 7, the City of San Diego’s Environment Committee voted in favor of a code change that will reduce food waste and increase food-waste sharing. On the road to the landfill, city trash trucks will lose some of their contents, and composters are cheering like dumpster divers. For the first time, both types of businesses can become certified to haul food waste.

"By recognizing these revisions you not only recognize San Diego as a place for craft beer but for craft compost," said Sarah Boltwala-Mesina, executive director of Food2Soil, one of a few small composters that will apply for a license to collect recyclable materials. The business has had to operate in a gray area in the city code when collecting food scraps, and a fee, from restaurants. Now, they can emerge from the shadows, Boltwala-Mesina told the committee.

"Stepping out of this gray area and into the spotlight with us are broccoli stalks, citrus fields, wilted salad greens, coffee grounds, and juice pulp from all over the city."

While meat, bones, and dairy will have to be sent to a permitted facility, vegetable scraps can go straight to community gardens or farms. Under the city's reporting requirements, collectors must provide a letter from property owners where composting occurs, acknowledging the work in case odor or nuisance issues arise.

Earlier this year, the city sent warning letters to soil business Closing the Loop after neighbors complained about odors from compost piles. Months later, another city code change threatened to shut down such small enterprises in San Diego. That code, effective in July, helped fund the city's zero-waste plan through fees paid by certified haulers, but it barred the composters from charging fees to collect the small amounts of scraps that restaurants are allowed to discard. Food waste was left out of the materials the city's certified recyclable material collectors were allowed to haul.

Ken Prue, the city’s program manager of waste reduction, explained that haulers could take up to 1000 tons per year of "exempted materials," but food waste wasn't included since none of the certified haulers was taking food waste. Also, there were concerns about public health and odors. As July 1 approached, "we had concerns from the newly formed Healthy Soils Coalition," Prue said, mainly on the prohibition on certified collectors picking up food waste.

So, the city is amending the amendment, which now goes to the city council for final approval. The revision allows food waste and adds two new exclusions that renew scraps. One is for juice pulp or spent brewery grains, which could be self-hauled, say, by a brewer or farmer taking it to a farm to feed livestock. The other is for liquid byproducts from beverage processing, mainly used cooking oil and juice-pulp trappings.

Facing the new competition, franchise haulers spoke out at the meeting.

"Our concern really is with the potential impacts to the city's revenues," said Jeremy Obel, spokesman for the San Diego County Disposal Association, which represents the city's three largest franchise haulers. "Every ton of food material excluded from the franchise is not subject to the $27 in fees" that pay into the city's refuse disposal and recycling funds. That money supports waste-reduction programs, as well as the climate action plan and zero-waste plan.

"There are already eight certified recyclable materials collectors," Obel said. Since each can take up to 1000 tons of exempted material to the landfill each year, the city could lose $27,000. "The concern is that there's no limit on the number of collectors that could be certified."

So, the haulers want the city to put a cap on the number of certified collectors or limit eligibility to those who were operating before the code change in July.

Mario Sierra, director of the Environmental Services department, said the city, in drafting the exemption, did include only those in business at the time — until they learned about the small composters who would be harmed.

"There is a significant financial impact, which is one of the main reasons we are recommending that this be a one-time opportunity" for those in business to continue, Sierra said. "But I think it's a fair compromise." Prue said there will be a single 30-day enrollment period to apply. "We are anticipating a few existing non-haulers to become certified, such as Food2Soil, and potentially our franchise haulers as well, for a possible net increase of up to 12 certified collectors." (The city has already helped Closing the Loop become certified).

Despite the lost fees, the city is on track to meet its zero-waste goals, reaching 75 percent diversion by 2020. But they've had to make some adjustments.

"Anytime that tonnage is removed from the AB 939 and franchise fees, we need to make a tough decision," Sierra said. "When zero waste gets fully implemented, we need to make sure we support all the other citywide services being provided."

According to a staff report, the city lacks adequate organics recycling infrastructure to achieve its zero-waste plan targets.

"The type of organics recycling infrastructure the city needs to meet these goals is not small-scale composting, but large-scale diversion operations that these small recyclers cannot satisfy."

Sierra said the city is moving forward to build a resource recovery facility that can process up to 40,000 tons of organics per year, of which up to 20,000 tons could be food waste.

"Today we are accepting up to 8000 tons of food at the Miramar landfill."

The annual 1000 tons of food waste certified collectors will be allowed to take is way beyond the scale of small composters like Food2Soil, which Boltwala-Mesina said now handles about 50 tons. Along with Closing the Loop, the two companies combined expect to pick up 550-600 tons.

But the businesses, who support decentralized composting to help recover food waste, welcome the challenge. Elly Brown, director of the San Diego Food System Alliance, suggested a longer, more flexible enrollment period "to allow new innovators."

For now, the local soil producers say they can't make enough compost to fill the needs of urban farmers and community gardeners.